Case Study

Literature

Homeownership 'becoming preserve of the wealthy'

16th September 2014

The dream of homeownership could soon become an unrealisable one for all but the wealthiest of individuals, a new report reveals.Entitled 'Broken Market, Broken Dreams', the National Housing Federation (NHF) study shows first-time buyers now need to pay, in real terms, ten times the deposit needed in the early 1980s.In addition, today's first-time buyers have an average income of £36,500 - in the 1980s, the equivalent figure was only £20,000.While in 1979 this group had to borrow just 1.7 times their annual income to get their foot on the property ladder, this has soared to 3.4 times their income today.Unsurprisingly, many people are now relying on their parents for financial help. Some two-thirds now expect to receive this kind of assistance - double the amount seeking help from their parents five years ago.As a result of these trends, homeownership is increasingly becoming beyond the means of average earners, such as nurses, firefighters and plumbers.First-time buyers are older than before and the number of homeowners is falling, meaning purchasing homes is increasingly becoming the preserve of the wealthy.David Orr, chief executive of the NHF, said: "With the high salary and huge deposit younger generations now need to buy even a modest home, home ownership is quickly becoming an exclusive members club. Sadly, it will depend on the wealth of the family you were born into as much as your own hard work." A separate poll conducted by YouGov on behalf of the NHF provides further evidence of the affordability crisis, revealing almost 80 per cent of people in England think it's harder to own a home now than it was for their parents' generation.Around the same number said they do not expect the main political parties to offer a solution to their problems.Mr Orr called on the government to take action, insisting that the housing crisis can be solved if a long-term plan is put in place. "We desperately need politicians from all sides to commit to ending the housing crisis within a generation," he added.